Wagering’s last battleground fires up
THE Western Australian government, struggling with reduced mining revenue, is still planning to sell off its TAB but has to sort out how to satisfy its major “stakeholders” – ie the three racing codes. Currently, RWWA (Racing and Wagering Western Australia) not only operates the TAB but also controls each of the codes. It holds the purse strings while GWA runs the actual greyhound meetings.
Into the battle are both big gaming companies, Tabcorp and Ubet/Tatts, together with possible but less likely contenders from the corporate bookmaker group and Seven West Media (Kerry Stokes).
In the last three changes of this nature, Tatts got two prizes – SA and Tasmania TABs – while Tabcorp won a consolation price by buying up the tiny ACTTAB. Only WA now remains in government hands.
Along the way, Tabcorp has been discouraged from combining its NSW and Victorian arms (by the NSW government) and Tatts may have won a booby prize by concluding a 30 year agreement with the Queensland government to handle all its tote business. None of the three codes in Queensland are doing well at the moment – or in the past, for that matter, and Ubet does not enjoy a great reputation in the state.
Prior to some of those privatisations – and continuing now in WA – SA, Tasmania and the ACT had their tote business pooled with Tabcorp's Supertab. That practice generally improved the lot of punters because of the bigger betting pools so constructed. Anecdotal evidence suggests that many local punters in SA and Tasmania are still favouring the Melbourne-based Tabcorp and its much larger pools.
However, the position has now reversed because total Tatts turnover is not holding its own, largely due to poor takings in Queensland. In all cases, the status is a bit confusing as wagering business is migrating from the traditional tote to Fixed Odds offerings from both the TABs and corporate bookmakers. Unfortunately for racing authorities, the former attracts higher commissions than the latter.
A little more confusion is generated as Tabcorp (and Tatts to a lesser extent) push ahead with expanding operations in overseas jurisdictions. Amongst other factors, this is causing lesser meetings (usually greyhounds, especially those on SKY 2) to sustain life under reduced turnover, making them less attractive to genuine punters. Overlapping races mean the available cash is distributed more thinly. There is only so much to go around.
Despite all that, everywhere except Queensland is showing small rises in turnover and usually also in commissions earned. In the recent past, that growth has emerged from extra races but that fillip has now pretty well run its course. Consequently, we have to assume that the current betting package (tote plus Fixed Odds) is proving slightly more attractive at the margin, but for whom?
My guess is that some serious or even professional punters may be able to pick the eyes out Fixed Odds offerings from time to time but much more likely is that many folk just like the price certainty of what they get from the TABs and corporate bookies, regardless of the poor value they receive. And that value is seldom great by comparison with the tote. Of course, they may well have suffered the indignity of having their tote dividend chopped in half when they invested too much money on the tote. So now they are taking the better of two evils.
In fact, WA's recent report indicated that, coinciding with the rapid growth in corporate bookie turnover, the average bet size had fallen between the 2014 and 2015 years, thereby suggesting that less knowledgeable investors were present.
So what will influence the WA government's decision? It is clear it wants to sell but who will it favour as the buyer?
Without knowing all the confidential data, we cannot be sure exactly why SA and Tasmanian governments chose Tatts as their preferred buyer. The assumption has to be that they offered more than Tabcorp. (Remember also that the government tote in Tasmania had got itself into a bind because it had provided huge discounts to big punters and had thereby forgone most of its profits. Tatts wiped out those goodies immediately it took over).
In effect, this paralleled the earlier NSW decision to sell to the highest bidder without much consideration about alternatives that might have produced better long term returns – ie by adopting policies which might have some chance of increasing the size of the pie. More and better wagering competition would have been one such method but instead protectionism prevailed. States invariably want to improve the current annual budget rather than look towards, say, benefits over 10 or 20 years.
Whatever the reasoning, the fact is that SA and Tasmania bought into the weaker of the two major TABs. In this electronic age no serious punter would bother investing in a small pool when a larger one is readily available, as well as a platoon of online bookies.
WA now faces that same decision with the same over-riding factors in place. Given that Tatts is carrying a ball and chain in respect to Queensland and its total turnover is flat or negative, what can it possibly offer WA?
Tabcorp already has a longstanding relationship with WA racing – via Supertab – and must be a short-priced favourite to win the business. Always assuming, of course, that the state Treasurer (who is usually the key influence) does not opt for a higher bid with short term benefits only.
Alternatively, it would be an entirely different race were everyone to join in a national betting pool. The formguide would have to be rewritten and a new battleground established.
Yes, again
Blow me down if it hasn't happened again. Last Sunday yet another dog was “Retired” after racing at Sandown. The experienced 27-months old Shanlyn Hoss pressed hard around Sandown's first turn, only to suffer a broken hock as it tried to gather speed entering the back straight. The vet euthanased it.
Sandown is not the only place this happens but it is surely the most common, and always coming out of the first turn.
It would be interesting to compare Victorian stats for Retired, Injured and Euthanased dogs. Or maybe they are all chucked in the same basket?